Russia’s prime minister recently joined the country’s central bank in warning that Russia may fall into a deep recession this year. As the rouble continues to fall sharply, Russians are rushing to buy items, such as luxury cars, that will only go up in price. CCTV’s Tom Barton reported this story from Moscow.
Plunging currency spikes luxury car sales in RussiaRussia's prime minister recently joined the country's central bank in warning that Russia may fall into a deep recession this year. As the rouble continues to fall sharply, Russians are rushing to buy items, such as luxury cars, that will only go up in price. CCTV's Tom Barton reported this story from Moscow
Russian car showrooms have been busy.
“All the cars tagged with the original price in roubles were literally swept off our showroom floor within two weeks. We have no more cars to sell in roubles. However, our suppliers have been slow in delivering new ones, because they have no idea how to price them in the new exchange rate,” Sergey Mordovin, sales manager at a Lamborghini car dealership in Moscow said.
The price tags on luxury cars have encouraged wealthier consumers to spend.
Eager to try and move their money from cash into something more solid, customers have even queued up at vehicle showrooms. Prices have been changing so fast some companies have had to suspend deliveries.
Sergei Solonchenko, development director at Rolf Retail Auto traders, said they have seen huge sales since the rouble’s fall in value. But he added that once prices go up for new stock, the outlook will be bleak.
“The automotive market is going to experience very hard times in 2015. Many of the companies that are operating like dealers will be bankrupt, and that’s because the value of money will be quite high. Our business needs a lot of money to buy cars, a lot of operating money,” Solonchenko said.
Russia had been expected to overtake Germany as Europe’s largest car market earlier this decade. With low oil prices and sanctions from the West that continue to put pressure on the Russian economy, such growth seems less likely to happen soon.